Gen Dynamics (NYSE:GD)Historical Stock Chart

3 Years : From Mar 2012 to Mar 2015

PRAGUE--An aide of a former Czech prime minister has been arrested on charges of alleged corruption involving a 2007 deal to buy armored personnel carriers by the country's army, local business newspaper Hospodarske Noviny reported Tuesday.

The arrest further stokes the long-running scandal and weakens the conservative coalition cabinet ahead of regional and senatorial elections, the newspaper said.

Marek Dalik, the aide of Mirek Topolanek, the former prime minister in the previous conservative cabinet, was arrested late Sunday and charged with an attempt in 2007 to receive an 18 million euro ($23.5 million) kickback in exchange for the Czech government's decision to buy 199 Pandur armored vehicles from Steyr, an Austrian unit of General Dynamics Corp. (GD), a U.S. defense system maker, the newspaper reported.

Mr. Dalik had no official position in the government and the deal was canceled in late 2007 but subsequently revived and concluded at reduced levels by the following cabinet. The Czech army eventually purchased 107 armored vehicles for EUR14.4 billion, the newspaper said.

The arrest of Mr. Dalik and ongoing investigation of the armored vehicle deal comes just three days ahead of elections in regional governments and the Senate, Czech parliament's upper house.

The ruling conservative Civic Democratic Party, or ODS, now headed by Prime Minister Petr Necas, Mr. Topolanek's successor, is trailing the opposition center-left Social Democrats ahead of the polls, scheduled for Friday and Saturday, as voters tire of government austerity measures and brewing corruption scandals.

Write to Leos Rousek at leos.rousek@dowjones.com

Go to http://blogs.wsj.com/emergingeurope for the new WSJ and Dow Jones blog on Central and Eastern Europe, covering business, politics, society and more, written by our correspondents across the region.

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